Will soaring Thanksgiving food costs drive new shoppers to discount grocers?

The forecast: The cost of a traditional Thanksgiving meal is expected to be 13.5% higher than a year ago, per IRI.

  • That’s slightly higher than the 11.2% year-over-year increase in grocery prices reported in September due, in part, to turkey prices soaring as a result of the avian influenza.

The opportunity: Inflation has driven 29% of grocery buyers to begin shopping at less expensive stores. Given that no holiday is more closely tied to home cooking, several discount grocers see a unique opportunity to attract new customers into their stores by offering steep discounts on Thanksgiving ingredients.

  • Walmart is selling holiday basics, such as turkey and potatoes, as well as convenience items, like Ocean Spray cranberry sauce and pumpkin pie, at the same prices as last year.
  • Aldi last week launched its “Thanksgiving Price Rewind” promotion in which it is discounting a range of items including brie cheese, prosciutto, cornbread stuffing, and apple pie to its pre-pandemic 2019 prices. The retailer is featuring a Thanksgiving Price Rewind icon in local ads and throughout its stores.
  • Lidl is selling a $30 Thanksgiving basket of 12 items—including turkey, milk, and pie crusts—that it says provides shoppers with enough ingredients to feed up to 10 people.
  • It isn’t just discount stores seeking to capture a larger share of Thanksgiving shopping; BJ’s Wholesale Club is offering members who spend $150 in a single transaction a coupon for a free whole turkey.

Building loyalty: Retailers are seeking to boost membership in their loyalty programs by offering participants unique discounts. While that type of initiative isn’t new, it’s particularly effective as consumers grow more value-oriented. In the past few months, 20% of shoppers seeking to save money at the grocery store have signed up for a free loyalty program, and 9% have enrolled in a paid membership program such as Walmart+ or a BJ’s membership, per our September survey conducted with Bizrate Insights.

  • Some merchants are offering discounts on a specific item. For example, members of Lidl’s free myLidl program can buy a frozen turkey for 49 cents per pound.
  • Others are leveraging rewards to build long-term loyalty. For instance, Walmart is offering Walmart+ members access to over $1,000 in Walmart Rewards offers on hundreds of items.

The big takeaway: Inflation has reduced consumers’ brand loyalty. While this inflationary environment may be temporary, discount retailers have the opportunity to create positive experiences for customers that could translate into lasting loyalty.

Go further: Explore other tactics retailers can take in our Grocery Inflation report.

This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.